Hello, everyone, and thank you for joining us today for the LCI Industries Fourth Quarter 2025 Earnings Call. My name is Lucy, and I'll be coordinating your call today. Before we begin, I would like to remind you that certain statements made on today's conference call regarding LCI Industries and its operations may be considered forward-looking statements under the securities laws and involve a number of risks and uncertainties. As a result, the company cautions you that there are a number of factors, many of which are beyond the company's control, which could cause actual results and events to differ materially from those described in the forward-looking statements. These factors are discussed in the company's earnings release, Form 10-K and in other filings with the SEC. The company disclaims any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date of the forward-looking statements are made, except as required by law. In addition, during today's conference call, management will refer to certain non-GAAP or adjusted financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are available in the company's earnings release and investor presentation, which have been posted on the Investor Relations section of the company's website and are also available on Form 8-K filed this morning with the SEC. On the call from management today are Jason Lippert, President and Chief Executive Officer; Lillian Etzkorn, Chief Financial Officer; and Kip Emenhiser, VP of Finance and Treasurer. [Operator Instructions] With that, it is my pleasure to turn the call over to Jason Lippert.

Thank you, and welcome, everyone, to our Q4 2025 earnings call. We are pleased with the company's strong results as our team continues to execute effectively, delivering a 16% year-over-year top line growth, along with further margin expansion in the fourth quarter. By leveraging our diverse competitive strengths, we capitalize on opportunities across our RV, aftermarket, transportation, marine and housing end markets. At the same time, our relentless focus on our operational efficiencies drove enhanced profitability with fourth quarter operating margin more than doubling, expanding 180 basis points compared to Q4 of the prior year. Starting with our OEM segment. Net sales increased 18% to $737 million in the fourth quarter. RV OEM revenue rose 17%, driven by market share gains, increased sales of newer products, and a favorable mix shift toward higher content units. Our other OEM end markets, transportation, marine and housing delivered 21% year-over-year net sales growth to $297 million or 8% on an organic basis. This growth was primarily driven by market share gains and content growth in North American utility trailer, bus and marine OEM customers. Bus-related content contributed $31 million of year-over-year growth in the quarter, reflecting the recent acquisitions of Freedman Seating and Trans Air, for which integration efforts and synergies are ahead of plan. Looking ahead, we expect to expand market share across all 4 of our OEM markets. As we move into 2026, we expect RV wholesale shipments to range between 335,000 and 350,000 units, while we expect the boat industry to remain flat to up low single digits. Despite a potential flatter industry backdrop, we have multiple growth strategies in place that we believe will drive OEM expansion in excess of overall end market volumes. Central to this strategy is our relentless focus on innovation. Since 2020, new products and…

Thank you, Jason. We ended the year on a strong note with the fourth quarter results that included double-digit top line growth and meaningful margin expansion. These results cap a year of progress in which the hard-working men and women of LCI executed our strategic initiatives, demonstrating the potential of the LCI platform, and we entered 2026 well positioned to generate even stronger results in the new year. For the fourth quarter, consolidated net sales were $933 million, up 16% year-over-year. OEM net sales grew an even stronger 18%, which included 17% growth for RVs, primarily driven by sales price increases due to higher material costs, a favorable mix shift towards higher content fifth-wheel units and LCI's ongoing market share gains. We also generated 21% top line growth across our other OEM end markets with transportation and marine expanding year-over-year, partially offset by a modest decline in housing. Primary drivers included sales from acquired businesses and higher sales to North American utility trailer OEMs. Our content per towable RV unit increased 11% over the prior year to $5,670 and content per motorized unit was up 7% to $3,993. Towable RV organic content grew significantly, up 3% year-over-year, driven by the continued success of our recent product launches. Content levels also benefited from the continued strength of higher contented fifth-wheel units. We also expanded motorhome RV content per unit by 7% to nearly $4,000. Turning to Aftermarket. Our net sales expanded 8% versus the prior year quarter to $196 million, primarily driven by product innovations and increased demand for our upgrade and service parts as more units enter the upgrade and repair cycle to which Jason referred. Our consolidated operating profit during the fourth quarter was $35 million, reflecting 180 basis point margin expansion to 3.8%. Our margin growth benefited from…

[Operator Instructions] The first question today comes from Bret Jordan of Jefferies.

This is Patrick Buckley on for Bret. Focusing on the 2026 outlook, I guess, how sensitive is that range to potential rate cuts? Do 3 or 4 rate cuts drive the high end or potentially higher? Or I guess, what other metrics drive that range there?

I would just say we're not factoring the rate cuts into the range. I think it's kind of steady state as we are right now. Certainly, if we get some rate cuts, that would be helpful. I mean a lot of our growth that we're planning on the top line is going to be predicated on market share gains and some of the other things we've talked about in the call. So is that helpful?

Yes. Yes. And I guess staying on the '26 guide here, can you help us bridge the difference between 2026 and what maybe a potential "normal run rate" looks like, I guess, between the COVID highs and the post-COVID lows, where do you expect to settle in during a more normal cycle?

Yes. I think when you look at the past cycles, I mean, we're kind of -- as I say to a lot of people, we went up to such a monster high that when we came down to half of the 600,000 down to 300,000, things broke into a lot of pieces. So I think we're going to be picking those pieces up for a while. It's been 3 years. I think it's going to be slow coming out of the cycle. So obviously, if you look at our forecast for 2026 with units at a midpoint of 345,000 or 344,000 whatever the midpoint is of our range. It's -- we feel like we're coming out slow and we'll pick up more momentum next year as we get through more of this. But I think we would say that the midpoint is probably 375,000 to 415,000 somewhere in that range in terms of what is more normalized for the near term. But as we've said on past calls over the years, and we feel like this is a 500,000-plus industry, but we got to get healthy before we get back to that.

The next question comes from Scott Stember of ROTH Capital.

Jason, I just wanted to -- early in the year, we're hearing of trade-up activity, mix shift towards higher-priced units. And obviously, we're seeing that in your results already. What are you hearing through your various touch points at retail? Just trying to get a sense if that narrative is continuing as we enter the selling season.

Yes. Yes. I think there's a lot going on out there on the retail side of things. I would say that there -- I've been and sat with and talked to a handful of the larger dealers lately. The larger dealers seem to be doing decent. But I think that there's a lot of small and midsized dealers that are struggling. I think everybody is struggling on the margin side. But I think everybody is being very disciplined. We had some weather. I heard that Camping World had as well as some other stores had 45 to 60 stores that were down for a couple of days because of weather. So we have that kind of thing going on this time of year. But I think the big guys are doing okay. Some of the smaller guys and midsized guys are struggling. And I think that's what gets us to our forecast of that 335,000 to 350,000. It just feels like things are moving slowly. And hopefully, we get some stronger retail numbers as we get into the selling season this year.

Got it. And then looking at the aftermarket, you called out the RV side, I guess, doing better, and that was -- if you look at the profit for aftermarket as well looked like it was a little bit lower. Maybe just talk about on the aftermarket RV versus the automotive side, maybe talk about [indiscernible] brands...

Yes, I think that some of -- go ahead, finish that.

Yes, go ahead, sorry.

I was just going to say that some of the headwinds on the aftermarket side related to the pricing on the auto aftermarket side. So we have pricing cycles that's typically January and April. So when you look at fourth quarter, some of our numbers on the profitability side were held up a little bit there, but all those increases due to the tariffs and all the other related inflation that we had last year will come in the next couple of quarters. But all in all, like we said, our aftermarket side of our business is doing well. We've got new products, new market share. We're continuing to gain steam on the RV side. And then as we said, we've got some really big opportunities on the automotive aftermarket side with the bankruptcy announcement of First Brands and what they're going through. A lot of pieces to pick up there for us.

Got it. And then just last question on guidance cadence. Anything we should know about modeling down to the bottom line for the first quarter?

Yes. So Scott, as you think about the first quarter, I think January is pretty indicative of what we're thinking that we're going to see from a year-over-year perspective. So we started off with an improvement over last year, but it is only 4%. I think we're expecting that, that's going to trend fairly consistently as we look at the quarter. And when we think about the margin cadence going through the year, we're not going to start at the 7.5% to 8% operating margin. We'll step into that as we go through the year.

The next question comes from Daniel Moore of CJS Securities.

Maybe go back to the first question a little bit. Guidance, kind of low to mid-single-digit growth for '26. Just talk about puts and takes, one, kind of price versus volume; two, expectations for content gains? And then how much revenue is -- are you contemplating being kind of coming out of the bucket, either deemphasized or discontinued either from consolidating facilities or kind of shedding low-margin business?

Dan, definitely a lot of puts and takes as we're looking at that potential range going into this year. From an organic growth perspective, we've talked before around that 3% organic growth. I'd expect that we continue to see that as we move through 2026, probably less so from a pricing perspective and more so from that market share expansion. I think we shared previously in the third quarter call that we're looking at maybe $75 million of potential divestitures of that lower-margin product. So that's going to be one of the takes from the growth. And then modest expansion across the markets, flat to modest expansion as we highlighted in the prepared remarks. So definitely puts and takes. but feeling good as we're starting the year.

And then I would just add that our expectation is continued content growth. Obviously, we had a nice content growth year -- this past year. But I look at -- last year was a tough market. We grew $380 million in that market, some through M&A and through organic growth and market share gains. We expanded our margin during that time. We consolidated facilities to the tune of 5 facilities, which helped. And we've got that momentum carrying on into this year with another 8 to 10 facilities while we, again, expect a little bit of flat to a little bit of growth in all of our markets, maybe a little bit more in aftermarket given some of the things going on there. But I think when you look at the growth that we had last year, significant growth in a really tough market, and we're continuing that this year with even some more ability to improve our cost structure. I think it's a really good position we're entering '26 in.

Really helpful. And maybe just following up on the last question. Looking at Q1, the full year guide implies 70 to 120 bps of operating margin expansion. I think last year it was around 7% or 7.8%, if I'm not mistaken, adjusted operating income. Just how are we thinking about kind of year-over-year growth as far as op margin for the first quarter given weather and some of the other issues?

Yes. I'd say probably less of a year-over-year growth from an operating margin perspective, more as we get into the latter part of the year to get us to that 7.5% to 8% margins. Yes. So I mean, I think first quarter is going to look very similar to the operating margins that you saw in the first couple of quarters of last year.

Very helpful. And then just going back to kind of the aftermarket opportunity. You talked about 1.5 million units coming into the age of repair in the next 1 to 3 years. How do we think about kind of that aftermarket business? You gave color for this year. How do you think about that ramping over the next 2 to 3 years? And what are your kind of near-term and longer-term operating margin goals in that business?

Yes. I think when it comes to those units coming into the repair and replacement cycle, again, a lot of those parts on those units that come into repair and replacement are proprietary. They need to use our parts. So all we know is we're getting closer and closer to when those units start to really flow into the dealers for service. So we've seen a little bit of that over the last couple of years, but we expect it to grow. Like I said, there's a lot of units out there that need -- that will need to come back into the repair and replacement cycle. And again, on the aftermarket side for automotive, we just have a lot of opportunity on just share gains through the First Brands issue, lots of hitch and towing and electrical business that's just going to be sitting out there out for bid, and we're the likely candidate there for that business just because there's really only been 2 strong players in that market over the last decade. And it's a high barrier to entry business. I mean you've got to have significant engineering and design built up to cover automobiles and trucks that go back 30 years to for fit and finish on the hitch and towing aspects. And then obviously, when we get to a situation like this, we've got a little bit more margin opportunity and control than what we would if there were more players. So I think our aftermarket margins will stay pretty steady. Lillian, I don't know if you have any other color there.

Yes. The only other thing I would add to that, Dan, is keep in mind, we have been doing investment into the aftermarket business really to support the future expansion. So the margins have been pressured from that. And in the near term, you're going to still see some of that pressure as we're investing in the facility in Texas, as we're continuing to support the investment into the distribution aspects for aftermarket. But I think longer term, clearly, we expect nice solid returns with the aftermarket business, just a little bit of near-term continued headwinds.

The next question comes from Joe Altobello of Raymond James.

I guess first question for you, Jason. Your industry outlook for wholesale shipments on the RV side is a little bit softer than what we talked about in late October. I'm just curious what you've seen over the last 3.5 months or so that makes you a little bit less sanguine on the industry this year.

Yes. Like I said, I think there's just still a lot of pieces to pick up. There's still a lot of -- probably the biggest answer to your question there is just there's a lot of mid- and small-sized dealers still out there. A lot of those dealers are going through the question of do they want to stick around? Do they want to sell to somebody bigger? I think the bigger guys have put the brakes on a little bit in terms of acquisition of some of these smaller dealerships. So it just feels like there's a little bit of a log jam up there until some of that gets sorted out. But we're taking a conservative approach. I mean, again, we feel that the industry can be a lot better. Some of it we just need some of the macro factors to come back and improve a little bit. But all in all, we're certainly coming off the bottom. We dropped at 300,000 went to 315,000 to 335,000 to 342,000 this year. So we're already seeing the beginning portion of coming off the cycle. It's just a matter of how quickly it's going to ramp up. And that depends on retail and the overall dealer environment out there.

Got it. Helpful. And maybe just in terms of the first quarter outlook, I think you mentioned similar to what you saw in January, call it, plus 4%. It's obviously a slowdown from 4Q plus 16%. Is that just a tougher compare? Or are you seeing other dynamics playing out here early in the first quarter?

I think it's just a lot of dealer and OEM discipline at this point in time. I mean they're being as good as I've ever seen in terms of just pumping the brakes and making sure that we're not getting ahead of ourselves and putting inventory out there that's just going to sit. So dealers and OEMs are ordering and building the right inventory, I feel better than I've ever seen. And I think they're just waiting for the retail numbers to pop up. Shows have been good. Traffic has been decent. There's no signs out there that would point otherwise that it would be going the other way. So we do think it's -- we should be up a little bit this year. But those are some of the early indicators.

The next question comes from Tristan Thomas-Martin of BMO.

First, I want to follow up on Joe's questions. So up a little bit at retail for the RV industry year-over-year. Is that right?

I think retail and wholesale stay pretty aligned this year. We'd love to see retail up. Again, I think some of it is just going to depend on how the macro factors play out over the next months. The tariff environment not being here this year will help significantly because pricing is a little bit more consistent. We can rely upon at the moment where we're at with things.

Okay. And then just kind of on the changes which you've announced, look, I just want to summarize to make sure I'm understanding it correctly. It sounds like dealers are just continuing to be maybe a little bit more hesitant than you thought to take on new inventory?

I think they're just being -- I just think they're being cautious right now. And again, we had some significant weather. I mean we have weather in the North during this time of the year, but the weather was kind of spread out all over the place. Again, some of the numbers I heard from some of the bigger dealers where they had multiple days of shutdowns and 50 to 60 stores across the country, some of them -- I mean, that's a big -- I mean nobody can go in and buy RVs when that many dealerships are shut down. So I think that, that's played a little bit of a role. But ultimately, we still feel optimistic that this year can be better than last year.

Okay. And then just one more question. Can you maybe remind everybody the kind of typical RV trade-up cycle is from a consumer standpoint? And then maybe could it be maybe a little bit quicker this time just because there's been a lot of really cheap smaller kind of low content RVs that have been sold in the last couple of years?

Yes. I think to your point, on the more entry-level stuff, especially the single axle product, you're going to see quicker trade cycles than you would on a bigger motorhome or larger fifth wheel. We typically say that the trade-in cycle is 3 to 5 years. And a lot of that just will depend on the buyer and the type of unit that they have. So obviously, we built -- the industry built a lot of those single axle trailers over the last 5 years. So we think that will bode well for the industry as people start to think about continuing camping in a bigger unit. But we've seen some of that improvement already with some of our content gains in the last few months.

The next question comes from Brandon Rollé of Loop Capital. Brandon Roll?: Just first on affordability. Could you just talk about maybe affordability in the RV industry entering 2026 versus maybe where we were last year and how that might overall have an impact on the industry's recovery. I think this is the first year pricing has started to come back up again, but rate relief really hasn't been significant, at least on the consumer side. So any comments there and how that might impact your pricing?

Yes. I think a lot of -- there's always a lot of pricing discussions going on. There's -- I think there's 2 big factors that usually weigh into how ASPs are going to end in any given year. And I think that the OEMs right now are really focused on driving those ASPs down through a lot of content realignment. So there's been a lot of that going on since model change to try to stay focused on bringing prices down. The only negative we have right now is just aluminum costs in general are up. So that's kind of a headwind for the industry, but it's near the 5- or 7-year high there. So -- but that will come back down. Right now, it's a little bit of a headwind. There's a lot of aluminum in a lot of these RVs that are built -- but we're working with our customers like we always do on good, better, best philosophies. And maybe a good is good enough instead of them buying a best type of product or a better type of product component for their RV to help bring pricing into better alignment for the consumer. And then you've got the third lever, which is a lot of OEM discounting and dealers discounting to try to move product and keep product moving so it doesn't get stale out there. And I think that our industry does a better job than most industries at managing those factors. You look at the boat industry and they're kind of strapped by engine prices. The engine prices really haven't come down much since COVID and boat prices are really high, and there's not a lot the boat manufacturers can do because it's the largest ticket item for components that they buy for the boat. So I think RV is in better shape.

The next question comes from Kevin Condon of Baird.

This is Kevin on for Craig at Baird. I was hoping to understand and unpack the margin guide a bit better. Just thinking the 70 to 120 basis points of improvement, wondering if you could comment on or rank order some of the largest drivers of that being operating leverage on the top line growth. Do you expect favorable mix impact, maybe the net incremental impact of tariffs? Just how you're thinking about some of those buckets contributing to that 70 to 120 basis points increase.

Well, I'll start and let Lillian chime in after. But I think one of the biggest things that I mentioned it earlier that we've got going for us is just some of the consolidation efforts we have and restructuring we have that we started early last year on. If you look at last year, like I said, we increased $308 million in our top line. Through our acquisitions, I think we acquired 1,000 team members. We ended the year 400 team members up over the beginning of last year. So when you consider that we grew $400 million, added 1,000 team members and ended only 400 from where we started, I think that shows the power of some of the consolidation efforts that we're making around G&A and overhead. So that would probably be one of the bigger levers. And obviously, that continues in just a dramatic fashion as last year because we're going to double -- we're going to nearly double the amount of consolidations we're doing this year that we did last year.

Yes. Thanks for that, Jason. And Kevin, building on that. So clearly, the consolidations are going to continue to benefit us. When we think about kind of the range that we have out there, part of what's still to be determined as we go through the calendar is the timing of those consolidations of those incremental 8 to 10. So we have the full year benefit of the 5 that we consolidated last year, which will benefit us throughout the year. And then as we cadence in the 8 to 10, which will not all happen, obviously, February 1 or March 1, it will cadence over the full year. That will also drive efficiencies for 2026. Additionally, as we have the incremental revenue coming in, we've typically guided and we'll continue to guide that incremental margins, roughly 25% are fair assumptions as you're modeling. So there's a benefit there. And really, as Jason was saying, we'll continue to drive overall operating efficiencies. So as we're able to get more volume and more units through our manufacturing facilities, you have better efficiencies just in your fixed cost absorption as well. So it really is a multitude of factors there that contribute to us being able to deliver that margin expansion and frankly, continuing us on that progression towards the double-digit margin which is what we've been talking about reaching. So continued steady progress towards that goal.

Understood. And then on the -- I think in the past, you've disclosed the single axle mix of shipments. Was that a metric that you offered for Q4? And I just wonder your expectations for 2026, if that's still a tailwind for the full year outlook?

Yes. So for the fourth quarter, we are providing it. It's in the presentation deck in the very back of the appendix. But the fourth quarter came in at about 21%, so a little bit up from the third quarter. So I think we're kind of bouncing around that 19% to 21%. Fifth wheels were definitely still strong as we reported. I think it's yet to be determined for the full year for 2026, but that 19% to 21% feels kind of like an ambient level at this point.

Yes. And just to give you a little bit more color, just for January, for example, single axles were a little down over last year January. Fifth wheels were up a little bit. So that's -- we're seeing that content move the right way for us, and we'll see how the rest of the year goes. That's just a 1-month look, but...

[Operator Instructions] The next question comes from Mike Albanese of Benchmark.

Just kind of a quick follow-up on really the last question. If you could just comment again on RV product mix expectations. Obviously, some momentum in the fifth wheels here. I mean, do you see that more as dealers kind of rightsizing or level setting inventory? Or is this more consumer-driven momentum that could continue?

Well, I mean, we hope that the that mix rightsizes back more toward not just fifth wheels, but higher contented trailers. It's just healthier for the industry. And again, we've put so much of that single-axle product into the industry over the last 5 years that eventually, that part of the market will get saturated, and then people will start trading up and that mix shift will happen hopefully a little bit more dramatically. But like I said, all I can tell you is January right now and kind of what we see in the very, very near term, which we've seen single axles drop a little bit over last year's same period. Fifth wheels increased a little bit over last year's same period in January. Talk at the shows that the high-end buyer is there and not as impacted as some of the entry-level buyers, a little bit more willing to spend money. So that's where we're at right now.

Thank you. We have no further questions at this time. So I'd like to hand back to Jason for closing remarks.

Yes. Again, thanks, everybody, for joining the call. And again, against a really tough backdrop, our performance, we feel, has been very, very strong. We've got lots of good things happening this year. Again, even if the industry is flat to a little bit up, we feel like we'll perform similar to last year and continue to make some of these consolidation efforts pay off on the bottom line. So thanks for joining the call. We'll talk to you next quarter. Thanks.

This concludes today's call. Thank you all for joining. You may now disconnect your lines.